Global Research and Evidence Lab 13 August 2024 Tsuruha Holdings Revising forecasts: Showing merger effects will be important Action: Earnings update We are updating our earnings estimates. In addition to lowering our OP forecast slightly, we are reflecting growth in the number of stores for the overall sector and continued upward pressure on labour costs over the medium term, and we are changing our OP margin forecast from FY5/30 onward from 4.5% to 4.0%. Measures to maintain or increase profitability in t ...

Investment Rating - The report assigns a 12-month investment rating of Neutral for the industry [1]. Core Insights - The company reported a core operating profit of ¥25.6 billion for Q1, reflecting a year-on-year increase of 7% and surpassing forecasts by 4% [1]. - The quarterly operating profit rose to ¥27.2 billion, exceeding consensus estimates of ¥23.6 billion, driven by higher stock profits and a business divestment gain of ¥1.3 billion [1]. - The company announced a share buy-back program worth up to ¥10 billion, representing 1.13% of shares in issue, and increased its quarterly dividend from ¥612 to ¥624 per share [1]. - The firm’s investment securities had a book value of ¥636.4 billion and a market value of ¥1.1 trillion at the end of June, indicating an 8% increase in book value compared to the end of March [1]. - The company has improved its financial visibility by increasing segmental disclosures and providing data on its securities holdings [1]. Financial Performance Summary - Revenue for FY3/23 was ¥643.98 billion, showing an 11.4% year-on-year increase, while FY3/24 revenue is projected to decline by 6.5% to ¥601.95 billion [2]. - Operating profit for FY3/23 was ¥86.62 billion, a 4.3% increase, with FY3/24 expected to rise by 9.2% to ¥94.55 billion [2]. - The net profit for FY3/23 was reported at ¥91.35 billion, with a projected increase to ¥122.23 billion for FY3/24 [2]. - The basic EPS for FY3/23 was ¥2,037.6, with an expected increase to ¥2,753.5 for FY3/24 [2]. Quarterly Performance - In Q1 FY24, the company reported revenue of ¥146.15 billion, a 4.3% increase year-on-year, and an operating profit of ¥27.22 billion, reflecting a 13.6% increase [3]. - The operating profit margin for Q1 FY24 was 18.6%, indicating a positive trend in profitability [3]. - The net profit for Q1 FY24 was ¥45.90 billion, showing a significant year-on-year increase [3].

Industry Investment Rating - The report provides a stock ranking for the Japan Food Sector, with Buy and Neutral ratings for various companies in the Beer & Beverage, Processed Food, and Tobacco/Others categories [5] Core Investment Thesis - The report highlights that share prices reacted sharply to concrete earnings figures during the April-June period, with stocks that reported stronger Q1 results than guidance and had high visibility of profit growth for the next fiscal year being favored [2] - Stocks with high medium- and long-term growth prospects but short-term earnings falling short of consensus were overly penalized by the market, presenting potential investment opportunities [2] Stock Recommendations - Nissin Foods is recommended as a Buy due to: 1) Q1 profit stagnation being attributed to a time lag in recording costs, 2) overseas instant noodle sales growing at a high single-digit rate, and 3) outperforming the market in terms of volumes in the US despite price mix issues [3] - Coca-Cola Bottlers Japan is recommended as a Buy due to: 1) strong monthly sales indicating continued positive news flow, and 2) high visibility for the next fiscal year with full contribution from price increase effects [3] Stock Ranking Details - Buy-rated stocks include Coca-Cola Bottlers Japan, Nissin Foods, Asahi GHD, Japan Tobacco, Kikkoman, and Toyo Suisan Kaisha among others [5] - Neutral-rated stocks include Suntory Beverage & Food, Dydo GHD, Itoen, Morinaga Milk, and Yakult among others [5]

Global Research and Evidence Lab 13 August 2024 Japan Equity Strategy & Thematic Research Event Watch: Focus on micro factors while also monitoring macro conditions Equity Strategy Japan Nozomi Moriya Strategist nozomi.moriya@ubs.com +81-3-5208 6260 Miranda Zhang Associate Analyst miranda.zhang@ubs.com +81-3-5208 6283 Focus on Japan-specific corporate change while monitoring macro conditions Having edged down 0.5% in July, Japan's TOPIX index fell by 20% in just three days in August in reaction to the BoJ's ...

Investment Rating - The report assigns a 12-month rating of Neutral to Evolution Mining [2][14]. Core Insights - FY25 guidance aligns broadly with a solid FY24 result, highlighting a final dividend of 5Acps in line with consensus [2]. - The price target remains unchanged at A$3.70, reflecting a neutral valuation stance [2][5]. - Key financial metrics show a revenue of A$3,216 million, surpassing UBS estimates of A$3,118 million and consensus of A$3,179 million [2]. Financial Performance - Underlying EBITDA reached A$1,513 million, exceeding UBS estimates of A$1,221 million and consensus of A$1,378 million [2]. - Underlying NPAT was A$482 million, compared to UBS estimates of A$297 million and consensus of A$354 million [2]. - Basic EPS was reported at 22Acps, above UBS estimates of 15Acps and consensus of 19Acps [2]. Guidance and Projections - FY25 guidance includes gold production of 710-780koz, with UBS estimates at 727koz and consensus at 743koz [2]. - Copper production is projected at 70-80kt, aligning with UBS and consensus estimates of 77kt [2]. - AISC is expected to be A$1,475-1,575/oz, with UBS estimates at A$1,460/oz and consensus at A$1,470/oz [2]. Valuation and Market Metrics - The report indicates a forecast price appreciation of -2.9% and a forecast dividend yield of 5.2%, leading to a forecast stock return of 2.4% [3]. - The market return assumption is set at 9.2%, resulting in a forecast excess return of -6.8% [3]. - Evolution Mining operates six mines across Australia and Canada, focusing on optimizing and upgrading asset quality [4].

Investment Rating - The report assigns a 12-month rating of Neutral to Orora, with a price target of A$2.16 [2][16]. Core Insights - FY24 results exceeded expectations, supporting a re-basing of FY25 consensus estimates. Revenue increased by 9% to A$4.7 billion, and EBIT rose by 26% to A$404 million [2][3]. - The company is undergoing a strategic review and is in discussions to potentially divest its North American Packaging Solutions (OPS) business [2][3]. Summary by Sections Financial Performance - FY24 revenue increased by 9% to A$4.7 billion, EBIT up by 26% to A$404 million, and net profit after tax (UNPAT) rose by 10% to A$224 million [2][3]. - Australasia Beverage EBIT grew by 2% to A$156 million, driven by a 2.5% increase in cans volume [2][3]. - North America EBIT remained flat at A$167 million, with OPS revenue down 11% in USD terms due to price deflation and lower volumes [2][3]. Outlook and Guidance - Orora did not provide formal Group earnings guidance but expects OPS EBIT to align with the 2HFY24 exit run-rate due to transformation benefits and cost management [2][3]. - Australasia EBIT is anticipated to be slightly lower in FY25, with growth in cans offset by the impact of furnace reline [2][3]. Valuation Metrics - Key financial metrics include a forecasted revenue growth to A$5.011 billion in FY25 and an EBIT margin of 7.9% [2][3]. - The report indicates a forecast dividend yield of 4.1% and a forecast stock return of -0.8% [4].

Investment Rating - The report assigns a 12-month investment rating of "Buy" for MatsukiyoCocokara & Co. with a price target of ¥2,960.0 [1][14]. Core Insights - The Q1 FY3/25 operating profit (OP) was ¥17.3 billion, a 1% year-over-year decline, which missed both the forecast of ¥18.7 billion and the IBES consensus of ¥18.8 billion. However, sales and gross profit exceeded expectations, while SG&A costs were higher than anticipated [1]. - The company plans to increase investment in human capital and IT for medium-term growth while maintaining OP targets. Consumption tax-free sales showed strength, increasing their share to 5.5-6% [1]. - FY3/25 guidance remains unchanged, targeting sales of ¥1,050 billion (up 3% year-over-year) and OP of ¥77.5 billion (up 2%). The IBES consensus for OP is ¥81.6 billion, indicating potential for downward adjustments [1]. Financial Forecasts - Forecast price appreciation is estimated at 30.5%, with a dividend yield of 1.9%, leading to a total forecast stock return of 32.3% [2]. - Revenue projections for FY3/25 are set at ¥1,054.6 billion, with operating profit expected to be ¥79.7 billion [1]. - The report anticipates a gradual increase in EPS from ¥128.7 in FY3/25E to ¥158.9 in FY3/29E [1]. Company Overview - MatsukiyoCocokara is a leading drugstore operator in Japan, known for its strong presence in central shopping districts and a high ratio of cosmetics and medical product sales. The company was formed from the merger of Matsumoto Kiyoshi Holdings and Cocokara Fine in October 2021 [3].

Investment Rating - The report assigns a 12-month rating of "Buy" for Amotiv Limited, with a price target of A$13.00 [2][15]. Core Insights - The report indicates that Amotiv Limited's FY24 results were in line with expectations, showcasing solid cash conversion and a balance sheet that is in much better shape compared to previous forecasts [2][3]. - Revenue for the company reached A$987 million, reflecting an 8% year-over-year increase, while EBITDA was A$224 million, marking a 6% increase year-over-year [2][3]. - The outlook for FY25 suggests further revenue growth and underlying EBITA, with expectations of stable new vehicle sales and resilience in wear and repair services [2][3]. Summary by Sections Key Numbers - Revenue: A$987 million (+8% y/y) vs UBS estimate of A$997 million (-1% miss) - EBITDA: A$224 million (+6% y/y) vs UBS estimate of A$221 million (+1% beat) - NPATA: A$119 million (+5% y/y) vs UBS estimate of A$117 million (+2% beat) - EPS: 84.4 cents per share vs UBS estimate of 82.3 cents (+3% beat) [2][3]. Result Highlights - 4WD & Trailering revenue increased by 5% y/y to A$349 million, while LP&E revenue rose by 13% y/y to A$325 million - Operating cash flow decreased by 17% y/y to A$171 million, with cash conversion around 93% - Net debt stood at A$329 million, with a net debt to EBITDA ratio of approximately 1.6x [2][3]. Valuation - The price target of A$13.00 is based on DCF/SOTP valuation methodologies, indicating a forecast price appreciation of 27.8% and a forecast dividend yield of 4.7% [4][6]. Guidance - The company anticipates continued growth in revenue and underlying EBITA for FY25, with corporate costs expected to be around A$14 million and capital expenditures projected at A$25 million [2][3].

Global Research and Evidence Lab 14 August 2024 First Read AGL Energy UBS SnapShot: 2H24 Results ONE LINER Solid in-line result with underlying EBITDA and NPAT finishing FY24 2% ahead of consensus estimates and FY25 guidance in line with expectations. A $250m acquisition of Firm Power & Terrain Solar adds battery development sites to AGL's portfolio. KEY NUMBERS 1) Underlying 2H24 NPAT $413m vs UBSe ($386m) and consensus ($397m) 2) Underlying 2H24 EBITDA $1,142m vs UBSe ($1,087m) and consensus ($1,104m) 3) ...

Global Research and Evidence Lab 14 August 2024 First Read BWP Trust UBS SnapShot: FY24 Result ONE LINER Strong result and g'dance for growth KEY NUMBERS NPAT (adj. for straight lining rent) $120.5m vs UBSe $117.5m (+1%). Distributable amount $124.1m and DPS 18.3c (pre-announced). RESULT HIGHLIGHTS 1. Comp. rental growth 4.2% (4.8% 1H24). Five Bunnings market rent reviews were finalised for the period, resulting in a 4.4% increase in rents. In FY24, rent reviews are split between CPI (51) and fixed (101) wi ...